Court Says "Buy the Farm" Means Just That

March 6, 2015 | Kristine A. Tidgren

State laws differ in the protections they grant to landowners facing eminent domain. In Iowa, for example, the Iowa Utilities Board can grant a company, such as a utility company, the right to condemn an easement through a private landowner's property if it finds that the proposed project would "promote the public convenience and necessity.” If the Board vests a company with the right of eminent domain, the landowner is forced to convey the easement. "Just compensation" is awarded, and the landowner retains actual ownership in the property.

Minnesota, on the other hand, has an interesting statute designed to grant farm owners additional protection. Under the "Buy-the-Farm" statute, Minn. Stat. § 216E.12, subd. 4 (2014), landowners faced with condemnation can elect to compel the utility company to purchase their entire parcel of "contiguous, commercially viable land" in fee simple.

The Minnesota Supreme Court recently found that the statute means what it says, ruling against a utility company that tried to avoid the statute's requirements. The statute states as follows:

When private real property that is an agricultural or nonagricultural homestead, nonhomestead agricultural land, rental residential property, and both commercial and noncommercial seasonal residential recreational property, as those terms are defined in section 273.13 is proposed to be acquired for the construction of a site or route for a high-voltage transmission line with a capacity of 200 kilovolts or more by eminent domain proceedings, the owner shall have the option to require the utility to condemn a fee interest in any amount of contiguous, commercially viable land which the owner wholly owns in undivided fee and elects in writing to transfer to the utility within 60 days after receipt of the notice of the objects of the petition filed pursuant to section 117.055.

The utility company was seeking to condemn an 8.86-acre easement through the landowners' property to construct a high-voltage transmission line. The landowners elected to compel the company to purchase their entire 218.85-acre plot of impacted farmland. The utility company resisted on the grounds that allowing the election was not "reasonable."

The trial court ruled in favor of the landowners and on Wednesday, the Minnesota Supreme Court agreed. The Court held that the statute did not allow a court to consider outside factors, such as the size of the parcel to be purchased, when ruling on an election to compel a purchase. The Court found that the utility company was trying to modify an unambiguous statute. Because the landowners' property was contiguous, commercially viable, and nonhomestead agricultural land, the district court had no choice but to approve the compelled purchase. The Court stated that the utility company would have to bring its policy arguments regarding the "unreasonableness" of the law to the legislature.

Great River Energy v. Swedzinski, A13-1474, 2015 Minn. LEXIS 108 (Minn. Mar. 4, 2015).